In June 2024, there was a decline in the annual growth in the total money supply (M2+) – all of the currency in circulation, as well as liquid financial products such as certificates of deposits – relative to the corresponding period of 2023, largely driven by a slower pace of growth in the Net Domestic Assets (NDA) of depository corporations, the Bank of Ghana’s Monetary Policy Report of July has said.

It noted that the Net Foreign Assets (NFA) position of the depository institutions, however, “improved significantly.”

Annual growth in M2+ declined to 34.2 per cent in June 2024, relative to 44.4 percent in the corresponding period of 2023.

The contribution of NDA to the growth of M2+ decreased to 10.8 per cent from 38.8 per cent, while that of NFA increased to 23.5 per cent from 5.6 per cent over the same comparative period.

In terms of annual growth rates, NDA expanded by 10.79 per cent per cent in June 2024, relative to 36.9 percent in June 2023, while the NFA expanded by 7,567.3 per cent relative to 108.7 per cent over the same comparative period).

The decline in the contribution of NDA to the growth of M2+ was mainly driven by a contraction in the Net Claims on Government (NCG) and moderated by increased investments in BOG bills and Other Items (Net)(OIN).

Analysis of the components of M2+ showed that the decrease in its growth largely reflected in declines in the growth in currency outside banks, demand deposits, savings and time deposits, and foreign currency deposits in June 2024 relative to same period in 2023.